A Case study of Procurement: General Motors



A Case study of Procurement: General Motors

Introduction

In the business environment, procurement is one of the most common practices. It is the strategic process of acquiring goods, services or ideas from any other external company. Companies are investing huge amount and human resources in order to have cost efficient and qualitative procurement. Purchasers are considering various factors before signing the contract of procurement. Time, location, delivery and standard are some of them. The small companies are identifying their needs and directly negotiate with any potential supplier.

On contrary, large corporations and public bodies are going towards Tender Notification. This one additional step gives them opportunity to buy the desired qualitative goods in competitive rate. In this technological world, the role of the internet is undeniable in every sphere of life. Today, the concept of E-procurement is spreading at very fast past pace. These are websites under the name of Supply Chain, Trade places and Business solutions. These B2B websites are offering various services and also the opportunity to purchase goods or services. The concept of E-Procurement had introduced in late 1999 and suddenly got popularity. According to one study, 85 percent companies are satisfied with E-procurement. In addition, 90 percent firms in US are in the process of setting E-procurement. The estimated E-procurement transaction is $ 1trillion. In the selected E-procurement case study, the US-based automobile company is discussed. General Motors is the pioneer in the automobile industry, and it had reached $ 63 billion per year in 2003 (Ageshin, 2001).

Determination of requirements

When any company like General Motors wants to enter in the process of E-procurement, it must have a running website. In website, there is also a need of the system which manages the tenders automatically. In US, there are many softwares, which are dealing with softwares e.g. System for Acquisition Management (SAM). This software includes the information of former and current Central Contractors. In the same way, the supplier is also connected on this system and bid for the posted procurement things. General Motors posts all the requirements on this systemDetermination of the source of supply

Today, E-procurement companies are providing unthinkable supply to the company. All the supply chain companies are integrated on a single platform and provide a variety of supply services (Huang et al, 2012). For example, Deloitte consulting provides three supply services. One, there is catalogue which show the specifications, prices, sale and also supply in all over the world. Second, there is the section of auctioning which is useful for the dumping of excessive inventory. Deloitte is not providing supply to the auctioneers. Third, online exchanges, this matches the sellers and buyers through bids. Based on the needs, General Motors select on of three services of Deloitte consulting. In the same way, there are various E-procurement companies and General motor select services according to its suitability. There are various small bidding companies which have hired the services of the best supply chain management ...